Active Stocks
Sat Mar 02 2024 12:29:56
  1. Tata Steel share price
  2. 155.30 3.53%
  1. HDFC Bank share price
  2. 1,430.50 -0.05%
  1. State Bank Of India share price
  2. 773.40 0.53%
  1. ICICI Bank share price
  2. 1,084.60 -0.21%
  1. Axis Bank share price
  2. 1,095.00 -0.40%
Business News/ Markets / Cryptocurrency/  Bitcoin outpaces equity market, hits 2-year high; Sensex, Nifty 50 lag behind the digital asset
BackBack

Bitcoin outpaces equity market, hits 2-year high; Sensex, Nifty 50 lag behind the digital asset

Bitcoin prices have tripled since the beginning of last year, rebounding from a 64% decline in 2022. It hit an all-time high of nearly $69,000 in November 2021.

Bitcoin price has risen 16.3% so far this year and on Monday it touched its highest since December 27, 2021.Premium
Bitcoin price has risen 16.3% so far this year and on Monday it touched its highest since December 27, 2021.

Bitcoin price hit the $50,000 level for the first time in more than two years buoyed by expectations of interest rate cuts later this year and last month’s regulatory nod for US exchange-traded funds (ETF) designed to track its price.

The world’s largest cryptocurrency has risen 16.3% so far this year and on Monday it touched its highest since December 27, 2021.

At 1:30 pm, bitcoin price was up 3.67% on the day at $50,025. Bitcoin prices have tripled since the beginning of last year, rebounding from a 64% decline in 2022. It hit an all-time high of nearly $69,000 in November 2021. 

On the contrary, the Indian equity market began this year on a weak footing. The Sensex has fallen 1.4%, while the Nifty 50 is down around half a percent in 2024 so far. The weakness in the Indian stock market is largely due to the outflow of foreign portfolio investors’ (FPI) money and expensive valuations.

The FPIs have sold Indian equities worth more than 28,400 crore so far this year on rising bond yields in the US amid expectations of a delay in interest rate cuts by the US Federal Reserve.

Analysts expect the rally in the prices of cryptocurrencies may continue going ahead led by the impact of Bitcoin Spot ETFs and market’s anticipation for Bitcoin Halving in May. 

Also Read: Bitcoin surges to $50,000 for the first time since 2021 on ETF demand

“From 1st Jan 2024 to Jan 10th (Bitcoin ETF approval date), BTC trading volumes grew from $16B to $50B - a 300% increase. This is the impact of the approved BTC ETF. However, the effects of Bitcoin Halving are yet to factor in," said Ryan Lee, Chief Analyst at Bitget Research.

Historically Bitcoin Halvings have resulted in driving BTC prices to new all-time highs (ATH) in the preceding year. The fourth Bitcoin halving will take place in April 2024. 

If the increased demand for the crypto continues, the Bitcoin halving is expected to mark the beginning of a new bull run for digital assets pushing Bitcoin beyond any historic all-time highs.

“The presence of a regulated Bitcoin ETF in the US has not only boosted the mass adoption of digital assets but has also acted as a solid template for other developing economies to leverage the true potential of digital assets. This just goes to show that investors are keen to invest, however they continue sitting on the fence as they await a nod from the authorities," said Manhar Garegrat, Country Head- India & Global Partnerships at Liminal Custody Solutions.

On the equities side, the outlook for Indian markets in the long run remains positive amid strong fundamentals despite the global uncertainties.

Also Read: Franklin Templeton registers for spot Ethereum ETF amid growing competition

However, the ongoing trend in the domestic markets suggests weakness in the midcap and smallcap space. Many such stocks driven up by speculative buying without consideration for the fundamentals are correcting. 

“This trend is likely to continue since many such stocks are excessively valued. The explosive growth in the number of demat accounts and the newbies chasing mid and small caps influenced by recency bias have contributed to this froth in the broader market. A correction in this segment is inevitable and desirable. Correction will give opportunities to buy fairly valued stocks in this segment like PSU Banks," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Analysts assert that the Indian stock market has exhibited robust performance, underscored by strong corporate earnings and macroeconomic growth indicators. 

The prevailing outlook remains optimistic, with an anticipation that large-cap stocks will outperform amidst the ongoing consolidation phase, analysts said.

Catch Stock Market Live Updates here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 13 Feb 2024, 01:28 PM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie